Considering two different residential properties


Problem: Suppose Megan wants to invest in real estate and is considering two different residential properties. Based on the expected incomes and operating expenses of each, she estimates that the first property (property A) has an NOI of $47,000 and that the other (property B) has an NOI of $40,000. If the cap rate is 9%, property A has an estimated value of $ and property B has an estimated value of $ . In deciding between these two properties, it is important for Megan to consider other factors. If she is a first-time investor, she is probably better off investing in property. (Note: Round your answers to two decimal places.)

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Accounting Basics: Considering two different residential properties
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